Overview
Financial statements are crucial tools for understanding a company's financial health. They include the balance sheet, income statement, and cash flow statement, each serving a unique purpose in financial reporting. The balance sheet provides a snapshot of what a company owns and owes, while the inc...
Key Terms
Example: Cash, inventory, and property are all considered assets.
Example: Loans and accounts payable are examples of liabilities.
Example: Shareholder equity represents ownership in the company.
Example: Sales revenue from selling products is a common source of revenue.
Example: Rent and salaries are examples of business expenses.
Example: If a company earns $100,000 in revenue and has $70,000 in expenses, its net income is $30,000.
Related Topics
Budgeting
The process of creating a plan to spend your money, helping to manage finances effectively.
intermediateFinancial Analysis
The assessment of a company's financial data to understand its performance and make investment decisions.
intermediateAccounting Principles
The foundational guidelines that govern the field of accounting and financial reporting.
advancedKey Concepts
Balance SheetIncome StatementCash Flow StatementEquity Statement